HONG KONG—
Alibaba Group Holding Ltd.
’s new entertainment arm expects to report a 2014 loss from delayed projects and impaired assets, even as a Chinese movie star had purchased a minority stake in the company.

Hong Kong-listed Alibaba Pictures Group Ltd. said late Monday it expects to swing to a loss of up to 600 million Hong Kong dollars (US$77.4 million) for 2014, partly dragged by a drop in revenue.

Revenue fell mainly due to delays in the distribution of TV drama series last year, a drop in magazine advertising and circulation revenue amid the downturn in the magazine industry and personnel changes, Alibaba Pictures said. An assets-impairment provision and fair-value change in warrants in the six months ended June also weighed on the bottom line, it said.

It didn’t offer details, and a spokeswoman declined to comment, saying the business would release more details in March.

Last month, Alibaba Pictures said its auditor found the company had misstated taxes and the financial impact of convertible bonds. It said its earnings in the first six months of the year would fall by up to HK$390 million. The company posted a profit of HK$235 million for 2013. Alibaba purchased a majority stake in the company in June and blamed the accounting issues on oversight by previous management.

Separately, Chinese movie star
Zhao Wei
and her husband bought a stake in Alibaba Pictures for about HK$3.09 billion last month. Ms. Zhao and her husband, Huang Youlong, on Dec. 20 bought 1.93 billion shares of Alibaba Pictures at an average price of HK$1.60 each, representing a 9.2% stake in the Hong Kong-listed company, according to the city’s stock exchange.

Alibaba Pictures’ shares were up 7.6% in Tuesday afternoon trading to HK$1.68.

Ms. Zhao, also known as Vicki Zhao, has appeared in the movies “Painted Skin” and a sequel, as well as “Red Cliff” and “Mulan: Rise of a Warrior.”